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Economy of Izmir


Izmir, known as the modern face of Anatolia and its portal to the West, has hosted different cultures, religions and civilizations for centuries. It is unique with its aspect of being a city of tolerance due to the cultural variety it has embraced until present.

Thanks to its economic size, Izmir is among the leading contributors to the Turkish economy.

The competitiveness of Izmir is not only within Turkey but also at a global scale. In the report “Global Metro Monitor 2014” prepared by Brooking Institute and JP Morgan Chase, Izmir is listed as the second rising economy among 300 cities in 2014.

As of 2017, Izmir is the third biggest city of Turkey with a population of 4,279,677 following Istanbul and Ankara. There are 2,133,548 men and 2,146,129 women living in Izmir.

The population growth rate in the city was 1.32 % in the 2016-2017 period.

While 122,700 people immigrated to Izmir in the 2015-2016 period, 98,900 people emigrated from the city.

The number of people per square metre in Izmir is 356 as of 2017 and the average household size is 3.04.

Izmir has 30 districts.

Trade, industry and tourism sectors are lively in central districts where the population is concentrated while agriculture and animal husbandry are prominent in districts farther from centre and tourism is more common as an economic activity in coastal districts.

Izmir is among the economies contributing the most to the country’s economy. Izmir got a share of 6.23 % of the Turkish economy with regards to the Gross Added Value in 2014. The GDP per capita is $14,257.

While trade activities are conducted in an intense manner in the city centre; small industrial sites, organized industry zones, free zones and techno parks also contribute to the development of the city industry. Markets located in the city centre of Izmir, commercial sites and shopping centres are intensive trade areas of the city.

In 2017, Izmir disbursed TL 63 billion in taxes. It is one of the cities with the highest tax revenues.

Table 1: Macroeconomic Data for Izmir

 

2013

2014

2015

2016

2017

2018

Unemployment Rate (%)

15.4

13.9

15.0

14.0

14.0

---

Employment Rate (%)

47.3

46.1

45.4

47.6

47.5

---

Public Investments (TL million)

1,209

1,476

1,639

1,763

2,751

2,083*

Subsidized Fixed Investment Amount (TL million)

1,800

4,543

3,448

1,871

7,553

2,387

(January-May 2018)

Number of Companies Established

(Cooperatives not included)

5,400

7,010

6,190

6,186

7,010

3,826

(January-June 2018)

Number of Companies Closed

(Liquidation not included)

2,085

2,038

1,455

1,378

1,607

798

(January-June 2018)

Tax Revenue Collected (TL billion)

36.3

39.8

48.3

52.3

630

40.3

(January-July 2018)

Total Bank Deposits (Billion TL)

48.6

54.7

64.6

76.9

89.6

---

Total Bank Cash Credits (Billion TL)

60.2

66.9

77.9

85.8

109.1

---

Number of Bank Branch Offices

826

837

824

785

766

---

Number of Companies with Foreign Capital

(1954- Cumulative)

 

2,110

2,229

2,422

2,568

2,633

(As of April 2018)

Source: Turkish Statistics Institute, Ministry of Economy, Ministry of Finance, Ministry of Development, Banking Regulation and Supervision Agency, Union of Chambers and Commodity Exchanges of Turkey Statistics, 2018

*Planned amount

Sectors of agriculture, animal husbandry, fishery, navigation, wholesale and retail trade, tourism, logistics, and energy are prominent in terms of investment in Izmir’s economy.

Izmir has almost all kinds of tourism opportunities: From yacht tourism to congress tourism, to faith tourism, and to cruise tourism, a considerable potential of tourism is present in Izmir.

Furthermore, Izmir shows the potential for becoming the centre of health tourism in the world with its rich geothermal sources and hot springs. Having rich renewable energy sources, Izmir is a city where wind, geothermal and solar energies can be used.

Being a port city, Izmir has always been a city of prominence as an important trade centre throughout history. Today, Izmir is a hub for various economic activities because of many advantages such as fertile lands, qualified labour force, sources of raw materials and intermediate products, suitable climate conditions, developed the port and logistics infrastructure, a business environment focused on foreign trade and the proximity to domestic and foreign markets. Ports have a considerable share in the foreign trade of the city.

According to the calculations made as of January–June 2018 calculations based on companies’ tax identity numbers, Izmir’s exports are worth $5.1 billion and its imports $5.2 billion. As of 2017, the exports of the city are worth $9.2 billion while that of imports is worth $9.8 billion.

According to the “The World’s Most Competitive Cities Report” prepared by the producer of the Site Selection Magazine, the American Conway Inc., established in 1954 and considered as one of world’s most important publications in the field of investment, Izmir ranked among the world’s top competitive cities of Eastern Europe and Central Asia in 2015 in aero-space, chemical-plastic and energy sectors.

According to the report, in Eastern Europe and Central Asia, Izmir is;

  • the most competitive city in the aerospace sector,
  • the 3rd most competitive city in the chemical and plastics sectors,
  • the 3rd most competitive city in the energy sector.

It is expressed in the report that Izmir came into prominence as;

  • it would grow considerably in the next 5 years,
  • it is the second largest commercial hub in Turkey,
  • it realized 9.3 % of Turkey’s industrial production,
  • it has a young and dynamic population of 4 million,
  • it hosts big scale investments of companies such as Socar ($4.8 billion of investment), Pratt & Whitney ($75 billion of investment), Deceuninck ($28 billion of investment), Abengoa/Befesa (industrial waste treatment and recycling activity).

Izmir is featured in many more foreign research companies’ reports each day. This indicates that opportunities Izmir provides to its investors are increasing.

Izmir’s success would increase incrementally if it got more share from the subsidy system and if the exporters managed to compete in equal conditions with their competitors abroad. Should the potentials of Izmir regarding renewable energy, chemical-plastic, aerospace, tourism, organic farming, food, beverages, agro-industry, ready-to-wear, textile and apparel, automotive, and logistics are used well, Izmir has a bright future.

To this end, the following tasks are needed to be accomplished:

  • the completion of big transportation investments such as Izmir-İstanbul Highway, Izmir-Ankara High-Speed Train Line, Izmir Çandarlı Port and the  “Izmir Gulf Transition Project” that would connect the northern and southern regions of Izmir,
  • the amelioration of the business environment in Izmir,
  • the organisation of more international exhibitions and congresses,
  • the increase in the number of direct flights from Izmir to important centres abroad, and
  • the creation of more employment possibilities for the qualified workforce of the city.

 

For More Information:

Erdem Alptekin - Şebnem Boran - Hande Uzunoğlu

Department of Research, Entrepreneurship and Development of Professions

Experts

Tel: (232) 498 41 44 - 498 43 05 - 498 42 27

Fax: (232) 498 46 35

E-mail: erdem.alptekin@izto.org.trsebnem.boran@izto.org.trhande.uzunoglu@izto.org.tr